Debt management could help pensioners

Friday 11th December 2009

Although the state pension was raised in this week's Pre-Budget report, senior citizens could suffer as the government curbs pension tax relief.

High-earners are set to have desirable tax benefits taken away from them following the announcement by the Chancellor.

He said in his statement to the Commons that they will lose higher rate tax relief on money saved in pension schemes. Furthermore, some pensioners will only receive 20 per cent tax relief on their pensions.

Many people may need to reconsider their retirement plans after this week's announcement. Those who have taken on debts may need to consider debt management.

Debt consolidation loans are one of the solutions available for people who want to get back their financial independence.

Charlie Kirby, deputy editor for Pensions Week said: "The government didn't exactly have a good reputation for promoting retirement saving before this Pre-Budget Report. The announcements yesterday will not have helped to improve that reputation.

"This is a bit of a shock, as the last we'd heard it was only going to be those with relevant income of £150,000 to £180,000. The government's decision to include those on £130,000 - where their employers put £20,000 or more into their pension - will be seen as political posturing by Labour's critics."

Last week, Help the Aged and Age Concern criticised the government for not committing enough resources to care for the elderly.

The charity claimed that 70,000 pensioners could fall into poverty unless the link between pensions and earnings is restored by 2012.

News article brought to you by Debt1 – Confidential Advice for Managing Debts.

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